Kamdhenu Ltd. (KAMDHENU) - Auditors Report

Company auditors report

To the Members of Kamdhenu Limited

(Formerly known as Kamdhenu Ispat Limited)

Report on the Financial Statements

We have audited the accompanying financial statements of Kamdhenu Limited ("theCompany") which comprise the Balance Sheet as at 31 st March 2016 the Statement ofProfit and Loss the Cash Flow Statement for the year thenended.andasummary of thesignificant accounting policies and other explanatory information.

Management's Responsibility forthe Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation andpresentation of these financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities selection andapplication of appropriate accounting policies making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report undertheprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance aboutwhetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure I" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act wereportthat:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer toourseparate Report in "Annexure N"; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 28 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For S. SINGHAL & CO.

Chartered Accountants

Firm Registration No.: 001526C

(R. K. Gupta)

Partner

Membership No.: 073846

Place: New Delhi

Date: 27th May 2016

(Referred to in Paragraph 1 under the heading of Report on other Legal & RegulatoryRequirement in our report of even date)

On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of ouraudit we report that

i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of the

fixed assets.

b. The fixed assets have been physically verified by the management at the reasonableintervals which in our opinion is considered reasonable having regard to the size of thecompany and the nature of its assets. No material discrepancies were noticed on suchverification.

c. According to the information and explanation given to us and on the basis of anexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii. Physical verification of inventory has been conducted at reasonable intervals bythe management and discrepancies noticed which were not material in nature have beenproperly dealt with in the books of accounts.

iii. According to the information and explanation given to us the Company has notgranted any loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013.

iv. According to the information and explanation given to us the Company has notgranted any loans/ investments/ guarantees and security where in the provisions ofsection 185 and 186 of the Companies Act 2013 are applicable.

v. The Company has not accepted deposits from public within the meaning of provisionsof Section 73 to 76 or any other relevant provisions of the Companies Act 2013 and rulesframed there under.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of Cost Records undersection 148 of the Act and are of opinion that prima facie the prescribed accounts andrecords have been made and maintained however we have not made the detailed examinationof such cost records.

vii. (a) On the basis of our examination of the records of the Company provident fundemployees' state insurance income tax

sales tax service tax value added tax duty of customs duty of excise cess andother applicable undisputed statutory dues have generally been deposited regularly withthe appropriate authorities except delays in few cases and there are no arrears ofoutstanding statutory dues as at the last day of the financial year concerned for aperiod of more than six months from the date they became payable.

(b) The disputed statutory dues aggregating to Rs. 1450.67 Lacs (Gross demand of Rs.1695.33 Lacs less deposited their against of Rs. 244.66 Lacs) have not been deposited onaccount of disputed matters pending before appropriate authorities as perdetails givenbelow:

viii. The Company has not defaulted in repayment of dues to banks or financialinstitutions. The Company has not issued any debentures.

ix. According to the information and explanation given to us & records examined byus the term loans taken during the year have been applied for the purpose for which theywere obtained. The Company has not raised money byway of initial public offeror furtherpublic offer (including debt instruments) during the year.

x. According to the information and explanation given to us no fraud by the Company oron the company by its officers or employees has been noticed or reported during the courseof our audit.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theCompany Act.

xii. The Company is not a Nidhi Company as prescribed under Section 406 of the Act.Accordingly paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanation given to us transactions with therelated parties are in compliance with Section 177 and 188 of Act wherever applicable andthe details have been disclosed in the Financial Statements as required by the applicableaccounting standards.

xiv. According to the information and explanation given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

xv. According to the information and explanation given to us the Company has notentered into non-cash transactions with directors or persons connected with them.Accordingly paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45- lAof the ReserveBank of India Act 1934.

For S. SINGHAL & CO.

Chartered Accountants

Firm Registration No.: 001526C

(R. K. Gupta)

Partner

Membership No.: 073846

Place: New Delhi

Date: 27th May 2016

Annexure II to Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of KamdhenuLimited ("the Company") as at 31st March 2016 in conjunction with ouraudit ofthe Financial Statements of the Company forthe year ended on that date.

Management's Responsibility forlnternal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required undertheAct.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on ouraudit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whetherdue to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemoverfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control overfinancial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that:

(a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the company; and

(c) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use ordisposition of the company's assets that could have amaterial effect on the financial statements.

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsoverfinancial reporting were operating effectively as at 31 st March 2016 based on theinternal financial controls over financial reporting criteria established by the companyconsidering the essential component of internal controls as stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.